Amazon Chairman and founder Jeff Bezos is currently vetting cities around the country, including Chicago, as a possible home for Amazon's new North American headquarters. (Photo by Scott Olson/Getty Images)

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Features » November 3, 2017

Rahm Emanuel’s Tribute to the World’s Richest Man Is Bad News for Chicago

The city’s $2.25 billion offer to Amazon shows that the mayor puts the needs of tech profiteers over city residents.

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Considering the power corporations wield over the economy — choosing when to relocate jobs and where to stash offshore accounts — we shouldn’t be surprised that cities across the country are offering massive giveaways in hopes of attracting one of the world’s largest tech companies.

Mayors in forty-three states, along with Washington, D.C., and Puerto Rico, want Amazon to build its new North American headquarters in their own urban enclaves, so they’re ready to give the company billions of dollars in tax credits and other incentives. Stonecrest, an Atlanta suburb, even offered to rename itself Amazon and appoint CEO Jeff Bezos as “mayor for life.”

These taxpayer-funded subsidies for highly profitable corporations are known as “corporate welfare.” Studies show that state and local governments give away $80 billion to corporations every year, while federal subsidies cost taxpayers at least $100 billion annually. This comes on top of hundreds of billions of dollars in tax breaks, mortgage deductions and other handouts. It all adds up to a free market that costs the public a fortune.

Of all the brazen offers on the table, one in particular stands out. Chicago Mayor Rahm Emanuel has put together $2.25 billion in subsidies to entice Bezos to open shop in the Windy City. Meanwhile, he’s slashed public services and hiked taxes.

Just this month, Emanuel presented his 2018 budget, which includes additional costs for rideshare services and a 28 percent increase in fees for calling 911. City Council member Carlos Ramirez-Rosa says the new budget “nickel-and-dimes working-class Chicagoans while giving the mayor’s rich and powerful campaign donors a free pass.”

These new taxes come on the heels of the largest increase in property taxes in modern Chicago history. Another hike is slated for 2020.

Since taking office, Emanuel has implemented new taxes on water, sewer, telephone use and garbage pickup, to name but a few. Altogether, he has raised the cost of living for an average Chicago family by at least $1,700. Meanwhile, he’s privatized more and more public services, from the public schools’ janitorial services to the Skyway, the toll road that connects the city to northern Indiana.

Critics allege that raising billions of dollars on the backs of ordinary Chicagoans in order to give it away to a powerful tech company is just the kind of corporate-friendly scheme that has earned Emanuel the nickname “Mayor 1 Percent.”

“It’s disturbing to see elected officials like Rahm Emanuel trying to stuff billions more into Jeff Bezos’s pockets,” says Amisha Patel, executive director of the Grassroots Collaborative, a Chicago-based coalition of social-justice organizations. “Chicago needs real solutions for working families, not more lavish handouts to the ultrawealthy.”

Miseducation

How can a city that has to massively raise taxes and fees afford billions in giveaways? According to Chicago Teachers Union (CTU) Vice President Jesse Sharkey, it comes down to priorities.

During his budget address, the mayor emphasized that he was raising taxes to cover the true costs of city services, but Amazon doesn’t have to pay for the true costs of their new building. The proposed multi-billion-dollar giveaway reminds us that Emanuel cares about the rich and their downtown showcase at the expense of everyone else.

Sharkey knows a thing or two about how the mayor makes decisions. As vice president of the CTU, he helped lead educators in a historic 2012 strike. While the teachers came out on top in that fight, Mayor Emanuel’s handpicked school board closed fifty public schools the next year — the largest single round of school closures in US history. Soon after, the board enacted severe budget cuts and laid off a thousand employees, targeting the union’s membership.

More recently, reports have surfaced showing that Chicago Public Schools (CPS) CEO Forrest Claypool, an Emanuel appointee, cut the special-education program budget by $29 million. At the same time, he’s trying to increase payments to outside consultants to a total of $28 million: almost enough to fully restore special-education services to the schools.

These cuts to public education align with Emanuel’s broader policy of hollowing out public resources. Just after he became mayor, he shut down half of the city’s mental health clinics, helping to make the Cook County Jail the largest mental hospital in the nation.

Meanwhile, Chicago continues to deal with horrific levels of gun deaths, concentrated in poor communities of color. Amisha Patel connects this segregated violence to the city’s refusal to invest in these neighborhoods.

“Chicago has become a poster child of the deadly consequences of this neoliberal approach,” says Patel. “The communities that the mayor has continued to disinvest in are the same communities experiencing high levels of violence.”

Such is life in a city with a neoliberal administration, hell-bent on recruiting the richest of the tech world while turning its back on its own residents.

What Bezos Offers

What does Jeff Bezos, the tycoon who is making city leaders grovel for the chance to become his new home, bring to the table?

Amazon claims that their new headquarters will create 50,000 new jobs and bring in up to $5 billion in construction spending. That may sound like a lot, but a closer look at what this development would bring tells a different story.

Without a trained workforce ready to take these tech jobs, they will go to transplants. One only has to look at San Francisco — a shell of its former self, full of businesses and housing developments for the wealthy but lacking basic amenities for the poor — to see what a tech-company paradise looks like.

Further, a corporation as viciously anti-union as Amazon will ensure its new employees remain unorganized and unable to collectively bargain. And if workers try to unionize? The company could just pack up and move away.

Once the new workers move into the city, longtime residents will likely see their housing costs grow while facing snarled traffic and increased congestion. The new headquarters might displace long-term residents as the city becomes unaffordable for anyone in the lower economic strata.

None of these consequences are likely to worry Amazon’s corporate brain trust, however. They are probably too busy celebrating the Trump administration’s decision to allow them to begin drone deliveries, a technology that will significantly reduce the company’s already precarious workforce.

Bezos, for his part, has his hands full counting his riches. He became the wealthiest man in the world after soaring stock prices netted a cool $9 billion over the course of a single night.

Bezos’s $90 billion nest egg speaks to the larger issue behind these offers: Why are cities scrounging together tributes for a company led by a merchant prince?

The answer lies with the logic of capital. Free trade deals allowed companies to move jobs overseas in order to avoid labor and environmental regulations, leaving American workers vulnerable. As a result, cities across the country have lost the industries that previously served as their economic engines. So, when a powerful corporation like Amazon offers to revitalize an urban economy, mayors jump at the chance, joining a race to the bottom that only ends in hollowed-out communities, gilded cities and multibillionaire profiteers.

What Chicago Needs

Amazon will not solve the problems facing any city, and certainly not Chicago. As Patel rightly points out, “Instead of money being invested where it is needed, Mayor Emanuel is choosing to divert resources to wealthy corporations. What could our communities do with $2.25 billion?”

For starters, the city could reopen shuttered mental health clinics and schools, adequately fund public education, provide community centers and job training, build public and affordable housing, support free health clinics for the uninsured or offer free early childhood education.

As the Economic Policy Institute’s Josh Bivens points out, “the gains from smart investments like early childhood education are more diffuse — they show up in thousands of kids doing a bit better throughout their entire schooling and working careers. But these latter benefits are bigger, and much more equitably shared.”

Such alternative uses for city funds are also being pushed by organizers behind the #NoCopAcademy campaign, which is seeking to stop the allocation of public money for another one of Emanuel’s disputed new projects: a $95 million police and fire academy, to be built in a heavily African-American area of the city where, on average, residents receive a paltry annual income of less than $11,000 and 42 percent of households live below the poverty line.

But these types of community-centered investments have not been the approach of mayors like Rahm Emanuel who would rather claim poverty until a corporate carrot is dangled in front of their eyes.

As the CTU’s Sharkey puts it, “Not just in Chicago, but across the whole country, the response of elected officials shows that they work for capital, not for people. Politicians are chasing after the ultimate twenty-first century sweatshop like a bunch of slobbering dogs after a bone.”

Politicians like Rahm Emanuel may want to sell off public assets to the highest bidder and bow down to companies like Amazon. But the bone they’re after will never bring economic security to those who need it most.

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Miles Kampf-Lassin, a graduate of New York University's Gallatin School in Deliberative Democracy and Globalization, is a Web Editor at In These Times. He is a Chicago based writer.
miles@inthesetimes.com
@MilesKLassin

Miles you really need not worry as a company like Amazon will not locate to Chicago. But where ever they do end up will experience an economic boom (and Rahm is correct in trying to get them in Chicago). It Is much more than 50,000 jobs and construction money. ALL area business will grow and benefits from Amazon (hotels, restaurants, transportation, airports, everyone). And for sure all major businesses are anti-union, and for good reasons. The only people that will remain in unions are the public employees in Illinois as they have bought out the democratic party. The results of union, piles and piles of debt, and a massive pension deficit (in other words, bankruptcy). You really need not worry because Amazon will not located to Chicago (or Illinois). They are much to smart to make that blunder!

Posted by 1Johnny on 2017-11-05 10:33:37

while I think it is ridiculous to give amazon billions of dollars, the alternative use of the money (which the city does not even have) is not throwing more money down the drain of the public schools( a popular battle cry that is said with religious zeal over and over and over.. but we all know is not the issue with the school system--how much is already spent per year per student?) or "free"(taxpayer funded you mean)early childhood "education". this is just a way for liberals to milk the taxpayer and payoff its supporters.(teachers unions) the city of Chicago and all other cities, towns etc job is to provide fire/police protection, safe drinking water and sewage disposal as well as working traffic lights and well maintained streets. selling your soul to a mega monopoly is not a smart move (focus on not harassing already existing companies to stay and grow and encourage entrepreneurial growth in the city --(grow business organically ) and the way the city does that is not treat business as the enemy and come up with endless stupid petty regulations and also tax companies to the point they owners say to heck with Chicago I am moving to Indiana or Florida or north Carolina.